The U.S.

Economy: A Brief
History
conti…….

Sachin…
GOVT. INVOLVEMENT….
 Accept The  concept of laissez-faire, …
 the 19th century, when small business, farm, and
labor movements began asking the government ..
  Radical political movements of farmers and
laborers in the Midwest and West. Known as
Progressives, these people favoured government
regulation of business practices to ensure
competition and free enterprise.
  Congress enacted a law regulating railroads in
1887 (the Interstate Commerce Act)
 preventing large firms from controlling a single
industry in 1890 (the Sherman Antitrust Act). 
  Interstate Commerce Commission, the Food and
Drug Administration, and the Federal Trade
New Deal era… President
Franklin D. Roosevelt
(1933-1945)
 extended federal authority in banking,
agriculture, and public welfare.
  minimum standards for wages and hours on the
job..
 catalyst for the expansion of  Labor Unions…
 Securities and Exchange Commission, which
regulates the stock market;
 the Federal Deposit Insurance Corporation, which
guarantees bank deposits;
 the Social Security system, which provides
pensions to the elderly
 labor unions won long-term employment
contracts 
The Post-war Economy:
1945-1960
 The automobile industry successfully converted
back to producing cars..
 New industries such as aviation and electronics
grew by leaps and bounds. A housing boom..
 GDP - $200,000 million in 1940 to $300,000
million in 1950 and to more than $500,000
million in 1960
  Farmers, on the other hand, faced tough times..
 1947 stood at 7.9 million, began a continuing
decline; by 1998, U.S. farms employed only 3.4
million people..
 technological innovations such as the invention
of air conditioning..
 development of "Sun Belt" cities such as Houston
, Atlanta, Miami, and Phoenix in the southern
Years of Change: The
1960s and 1970s
  President John F. Kennedy (1961-1963) ..
 accelerate economic growth by increasing
government spending and cutting taxes..
  medical help for the elderly, aid for inner cities,
and increased funds for education..
  Lyndon Baines Johnson (1963-1969), follow the
same path..
  Major Military force…..
 The 1973-1974 oil embargo by members of the
Organization of Petroleum Exporting Countries
(OPEC) pushed energy prices rapidly higher and
created shortages..
 inflation , rising rates of unemployment..
 Federal budget deficits grew, foreign competition
 President Jimmy Carter
(1977-1981)
 increasing government spending,,
 he established voluntary wage and price
guidelines to control inflation..
  "deregulation" of numerous industries, including
airlines, trucking, and railroads.
 The government relaxed controls on bank
interest rates and long-distance telephone
service, ..
  the Federal Reserve Board, which clamped down
hard on the money supply beginning in 1979..
 BUT …. The nation endured a deep recession
throughout 1982.
 Business bankruptcies rose 50 percent over the
previous year.
The Economy in the 1980s

  Ronald Reagan (1981-89)..
 The annual inflation rate remained under 5%..
 “ theory of supply-side economics”..
 The combination of tax cuts and higher military
spending overwhelmed more modest
reductions in spending on domestic programs..
 . From $74,000 million in 1980, the federal
budget deficit rose to $221,000 million in 1986.
It fell back to $150,000 million in 1987..
  George Bush (1989-1992),..
 "corporate raiders" bought various corporations
whose stock prices were depressed and then
restructured them, either by selling off some of
their operations or by dismantling them piece
by piece…

 The 1990s and Beyond

  Bill Clinton (1993-2000)…

 Joined Republicans to reduce welfare benefits.
 Although Clinton reduced the size of the federal work force.
 Technological developments , Innovations in telecommunications
and computer networking …
 Combined with low inflation and low unemployment, strong profits
sent the stock market surging; ..
 . A North American Free Trade Agreement (NAFTA) had
further increased economic ties between the United
States and its largest trading partners, Canada and
Mexico..
 Unemployment totaled just 4.1 percent of the labor force in
November 1999, the lowest rate in nearly 30 years.
 consumer prices, which rose just 1.6 percent in 1998 (the smallest
increase except for one year since 1964), climbed only
somewhat faster in 1999 (2.4 percent through October).
 Many challenges lay ahead, but the nation had weathered the
20th century -- and the enormous changes it brought -- in good
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